Defensive Stock Picks Better Than The Market (September 7, 2007)

We are frequently asked about how certain basket picks perform compared to the overall market. It has been years since anyone has claimed their stocks should gain regardless of the market because most people have smartened up to that nonsense. But "Defensive Stocks" do perform better in general on a relative basis in down markets. That isn’t a guarantee and that isn’t an absolute, but at least they did today.

Out of the 30 DJIA components, only J&J was up on the day. Out of the 17 defensive stocks we gave earlier this morning, 3 of the 17 closed up. On average of the 17 defensive stocks, if you invested in each one equally the picks would have ‘only’ been down 0.85% out of the basket. That is better than the DJIA, S&P 500, and NASDAQ.

For whatever it is worth, it’s worth noting that ‘relative performance’ doesn’t necessarily pay bills if the market heads too far south. Here is how the markets fared compared to the defensive stock picks: